Professional football is returning to Los Angeles County in full force, with a state-of-the-art 80,000-seat stadium approved to be built for owner Stan Kroenke's Rams at the heart of a 300-acre development in Inglewood. At an estimated cost of $2.6 billion, the project stands to become the most expensive sports complex in the world – but developers found a way to save time and money in the process of gaining city approval for the massive project through a loophole in California environmental law.
Ordinarily, a California-built development of this magnitude would require an extensive environmental impact review (EIR). According to the most recent California Environmental Quality Act (CEQA) Statute and Guidelines, "any of the physical conditions within the area affected by the project, including but not limited to land, air, water, minerals, flora, fauna, ambient noise, and objects of historic or aesthetic significance," must be reported in an EIR. The process can span months, and includes producing several-thousand-page reports and contentious public hearings on any such effects.
A previous competing stadium proposal from developer AEG for the now-defunct Farmers Field project in Downtown Los Angeles cost the company $27 million to draft the 10,000-page environmental impact report submitted in 2012. The Los Angeles City Council approved the project six months later, nearly two and a half years after AEG first announced it.
But developers of the Inglewood stadium gained approval for the project in February 2015, less than two months after first unveiling the plans to the public – and they spent significantly less than AEG did in the process.
How was this possible?
Looping into opportunity
Kroenke and his partner, the Hollywood Park Land Company, successfully took advantage of a loophole in CEQA that allows proposals enacted through the state's voter-sponsored ballot initiative process to bypass a full CEQA environmental review process.
According to University of Houston law professor Kellen Zale, who wrote an article on the CEQA loophole in 2013, a recent decision by the California Supreme Court held that a project proposed through the citizen-sponsored initiative process can bypass a full CEQA review before it ever appears before voters on a ballot. The Inglewood City Council approved the Rams' stadium rather than sending it to a ballot, as did the Carson City Council with a competing stadium bid brought by the San Diego Chargers and Oakland Raiders.
CEQA only applies to a project when a government agency has to make a discretionary decision on the project, Zale said. If the project's developers present a ballot proposal with the necessary number of signatures, as the Inglewood developers did, then the city clerk only needs to count and verify the signatures. Without a discretionary judgment call, the project never triggers the CEQA review process.
"The reasoning of the court was that the thing that the city council is doing when it approves the ballot proposal is not a discretionary action – it is actually just a ministerial action because their only choices under the law are to put it on the ballot for voters to vote on or to just approve it as it's written," Zale said.
Amy Forbes, a partner at the law firm of Gibson, Dunn & Crutcher and lead counsel for the Hollywood Park Land Company in the stadium deal, oversaw each stage of crafting the proposal so that it met the requirements for bypassing CEQA.
"We needed nothing more from the city of Inglewood at the end of this process than a building permit," Forbes said. "We couldn't have any other review, because any other review would have us circle back into the CEQA process."
READ MORE: Ramming Success into Inglewood
According to Forbes, the group only had one shot at the proposal, and every word had to be perfect.
"We didn't have anybody on the other side like we would in a standard deal. It was just ourselves, and we did not communicate with the city council for the reason that there was case law that said if the city council approves the stadium, that's a discretionary approval and you have to get an EIR. So we did this all in secret. We knew we needed the city council's support, so we had to have things in the initiative they would like, but we couldn't go talk to them to find out what they would like."
Forbes said plans changed quickly after the California Supreme Court decision mentioned by Zale, which allowed developers to move forward without an EIR even if the city council approves the proposition rather than the voters.
But moving forward with the process bypassing CEQA entirely opened up the project to some public criticism, Forbes acknowledged.
"We got a ton of pushback. The L.A. Times had a huge editorial, 'This is terrible, this is unlawful,'" she said. "We got a lot of blowback on that, but we were helped because we had put together this very robust set of mitigation conditions, which had been put in other stadiums before us."
Where the grass is greener
If such a wide-open loophole is known to exist, why don't the courts to anything to strike it down?
According to Zale, the California Supreme Court took a strict interpretation of the language of CEQA and the California Election Code section that allows for the ballot initiative loophole.
"They basically said, 'The law is written this way, and it's pretty clear that it's written this way. We might not agree with it, but that's not our job as the courts to rewrite it; it's the legislature's. If they don't think it's right, they need to go in and amend the statute.'"
Zale argued that the law should be updated, because it is based on an outdated definition of what a ballot initiative and "vote of the people" are.
When CEQA was first passed in the 1970s, most voter initiatives were small, grassroots efforts, said Zale. Lawmakers at the time included an exemption because they thought that making CEQA apply to those small initiatives would be too burdensome on these grassroots organizations.
Today, however, the process of getting an initiative on the ballot is anything but small and grassroots.
In fact, according to campaign finance reports, Kroenke spent $1.7 million of his own money to fund the ballot initiative process, fast-tracking his project.
Zale said a loophole like that just doesn't make sense any longer in today's world.
"The problem is that if the initiative process is supposed to be putting the voters in the shoes of lawmakers, they are supposed to be informed lawmakers," she said. "If our legislators were voting on this, they would get all of the environmental information because the project would have to go through CEQA. But the same exact project, if it goes through the initiative process and voters vote on it, it doesn't have to go through CEQA, and so voters are kind of voting blindly in a way."
Another issue, Zale said, is that citizens are not getting the information they would get if they were lawmakers.
"If we want the voters to step into the shoes of lawmakers," Zale said, "We should give them all of the tools that lawmakers would get in that situation.